Financial Services Law - Money Laundering .ppt

Financial Services Law - Money Laundering .ppt - Money...

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Money Laundering & The Financing of Terrorism FSL.
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What is Money Laundering [T]he process whereby the proceeds of crime are put through a series of transactions in order to conceal the criminal origins and give them the appearance of legitimacy.
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What is money laundering? Illegal or dirty money is put through a cycle of transactions (or washed) so it comes out the other end appearing legal or clean money, allowing criminals to maintain control over criminal proceeds.
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Stages of Money Laundering The Money Laundering Process consists of the following: Placement; Layering; and Integration
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Placement When the proceeds of the crime , often in cash are placed into the financial system For instance cash deposits in a bank. Cash paid into bank (sometimes with staff complicity or mixed with proceeds of legitimate business). Cash exported. Cash used to buy high value goods, property or business assets.
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Layering Proceeds are moved usually through a series of transactions. Which involves different entities, assets and different jurisdictions in order to sever any audit trail. Wire transfers abroad (often using shell companies or funds disguised as proceeds of legitimate business). Cash deposited in overseas banking system. Resale of goods/assets. This makes it difficult to trace the origins.
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Integration When the Criminal resumes control of the proceeds when they eventually are free from any link to their criminal activity. False loan repayments or forged invoices used as cover for laundered money. Complex web of transfers (both domestic and international) makes tracing original source of funds virtually impossible. Income from property or legitimate business assets appears "clean".
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Stages
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Techniques Smurfing - Also known as structuring deposits. Breaking up large amounts of money into smaller less suspicious amounts. Underground/Alternative Banking - well established alternative banking systems that provide for undocumented deposits, withdrawals, transfers and leave no paper trail. Operate outside government’s control. Shell companies - Fake companies that exist for the sole purpose of money laundering. They provide no goods or services rather create fake invoices and balance sheets Investment in legitimate companie s- The use of clean businesses to lauder illicit money. ‘Front office companies’ that provide legitimate goods and services are used.
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A Person who knows or who ought to have known that property is or forms part of the proceeds of crime and (a) enters into any agreement or engages in any arrangement or transaction with anyone in connection with that property, whether that agreement, arrangement or transaction is legally enforceable or not; or (b) performs any other act in connection with such property, whether it is performed independently or with any other person, whose effect is to— (i) conceal or disguise the nature, source, location, disposition or movement of the said property or the ownership thereof or any interest which anyone may have in respect thereof; or
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  • Winter '16
  • Law, Financial services

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